PHILIPPINE-OVERSEAS DRILLING AND OIL DEVELOPMENT CORPORATION, PETITIONER, VS. THE HON. MINISTRY OF LABOR, HON. FRANCISCO L. ESTRELLA, REGIONAL DIRECTOR, REGION IV, MINISTRY OF L…

Philippine-Overseas Drilling and Oil Development versus Melendres

The Case

This is a special civil action for certiorari brought by Philippine-Overseas Drilling and Oil Development Corporation against the Ministry of Labor, its Regional Director Francisco Estrella, and the private respondent Mariano Melendres, Junior. The company asks the Supreme Court to annul, for lack of jurisdiction, the Director's order directing it to pay Melendres a termination benefit of one month's pay for every year of service, amounting to 67,400 pesos, and the writ of execution that followed. The case matters because it fixes two enduring rules: jurisdiction over a labor dispute is determined by the facts alleged and the law in force at the time the action commenced, and a party who sleeps on the question of jurisdiction and raises it only at the last hour is barred by estoppel.

Procedural History

Melendres filed a verified complaint and opposition to clearance application before the office of the Regional Director of the Ministry of Labor, charging unfair labor practice and undue discrimination in the refusal to grant him separation pay. The Regional Director heard the case and, on August 7, 1980, issued the order awarding him 67,400 pesos as termination benefit under company policy. The company received notice of that order on August 13, 1980. On November 28, 1980, upon motion of Melendres, the Director issued a writ of execution. On December 10, 1980, the company filed a motion for reconsideration and appeal to the Minister of Labor, and on December 16, 1980, it filed this petition for certiorari with the Supreme Court. The Court issued a temporary restraining order on January 7, 1981, enjoining enforcement of the writ.

Facts

Melendres had been employed by the company since June 1969 and rose to Chief Geologist, earning a monthly salary of 6,740 pesos. On August 29, 1979, he tendered his irrevocable resignation effective one month from that date. When the company took no action, he wrote on November 20, 1979, inquiring about his resignation and claiming the separation pay and other benefits that the company had extended to other employees who had earlier resigned.

Instead of replying, the company filed on December 7, 1979, a verified application for clearance to terminate his employment effective September 29, 1979, on the ground of resignation. Melendres received a copy on December 12, 1979. On December 18, 1979, he filed his verified complaint and opposition to the clearance application, charging unfair labor practice and undue discrimination for refusing him separation pay.

The Regional Director found that documented evidence reflected payment of benefits to similarly situated employees, and that the non-grant of the same benefit to Melendres could be interpreted as unfair discrimination. He therefore ordered the company to pay one month's pay for every year of service. The company never filed a motion to dismiss or an answer, never submitted its position paper despite agreement to do so, and never raised jurisdiction in its motion for reconsideration. It assailed jurisdiction for the first time in this petition.

Issues

• Whether or not the Regional Director of the Ministry of Labor had jurisdiction over the dispute at the time the complaint was commenced on December 18, 1979.
• Whether or not the subsequent issuance of Presidential Decree Number 1691, vesting money claims in the Labor Arbiters, divested the Regional Director of jurisdiction to issue his order of August 7, 1980.
• Whether or not the company is barred by estoppel from raising the issue of jurisdiction for the first time on certiorari.
• Whether or not the Regional Director acted with grave abuse of discretion in granting separation pay to an employee who voluntarily resigned.

Applicable Provisions

Article 217 of the Labor Code, as amended by Presidential Decree Number 1367, provides:

Article 217. Jurisdiction of Labor Arbiters and the National Labor Relations Commission. — (a) The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-agricultural: (1) Unfair labor practice cases; (2) Unresolved issues in collective bargaining, including those that involve wages, hours of work and other terms and conditions of employment; and (3) All other cases arising from employer-employee relations duly endorsed by the Regional Directors in accordance with the provisions of this Code; Provided, that the Regional Directors shall not endorse and Labor Arbiters shall not entertain claims for moral or other forms of damages.

This provision defines the labor tribunals' competence over unfair labor practice and employer-employee disputes, and the Court reads it as confirming that the Director's office had authority over the complaint when it was filed.

Article 226 of the Labor Code provides:

Article 226. Bureau of Labor Relations. — The Bureau of Labor Relations and the Labor relations divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedures and/or voluntary arbitration.

This is the grant of authority over labor-management disputes that the Court applies to the complaint filed on December 18, 1979.

Article 228 of the Labor Code provides:

Article 228. Indorsement of cases to Labor Arbiters. — (a) Except as provided in paragraph (b) of this Article, the Labor Arbiter shall entertain only cases indorsed to him for compulsory arbitration by the Bureau or by the Regional Director of the Department of Labor. All parties to a case shall be furnished by the Bureau or by the Regional Director with a written notice of such indorsement or non-indorsement. The indorsement or non-indorsement of the Regional Director may be appealed to the Bureau within ten working days from receipt of the notice.

This provision shows the routing of labor cases through the Bureau and the Regional Director, which supports the Director's competence at the time of commencement.

Ruling

On the first issue, the Court held that the Director had jurisdiction. The fundamental rule is that the facts alleged in the complaint and the law in force at the time of the commencement of the action determine jurisdiction. The complaint charged undue discrimination in refusing separation pay, a dispute arising from employer-employee relations, and the governing law on December 18, 1979 was the Labor Code.

On the second issue, the Court held that Presidential Decree Number 1691 did not affect the order of August 7, 1980. Where a tribunal has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to final determination is not affected by new legislation vesting that jurisdiction in another tribunal, unless the statute expressly provides or is construed to apply to pending actions. The Decree contained no such intent.

On the third issue, the Court held that the company was barred by estoppel. It never filed a motion to dismiss or an answer, never submitted its position paper, and never raised jurisdiction in its motion for reconsideration. It assailed jurisdiction for the first time in this petition, and by then it was too late, regardless of the merits.

On the fourth issue, the Court held that the Director did not act with grave abuse of discretion. Findings of administrative agencies that have acquired expertise are generally accorded not only respect but even finality, and judicial review is limited to issues of jurisdiction or grave abuse of discretion. The finding of a company policy granting one month's pay for every year of service was supported by substantial evidence, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Having served for ten years, Melendres deserved his separation benefit notwithstanding his voluntary resignation.

Doctrine

Jurisdiction is determined by the facts alleged in the complaint and the law in force at the time the action is commenced. A tribunal that has already acquired and is exercising jurisdiction is not divested by later legislation vesting that jurisdiction in another tribunal, absent express or implied intent to apply to pending actions. A party that fails to raise the question of jurisdiction at the earliest opportunity, and raises it only after an adverse decision, is barred by estoppel from raising the issue, regardless of its merits. Findings of administrative agencies with acquired expertise are accorded respect and even finality, and are upheld if supported by substantial evidence. These rules tie directly to Articles 217, 226, and 228 of the Labor Code as quoted above.

Disposition

The petition was dismissed for lack of merit, the temporary restraining order was lifted and set aside, and no costs were imposed; the company lost and the award of 67,400 pesos to Melendres stood.

Remember This

The single line worth memorizing is that jurisdiction is fixed by the facts alleged and the law in force at the commencement of the action, and it cannot be attacked for the first time on certiorari after a party has sat on its rights. Examiners like to use this case to test the Tijam versus Sibonghanoy rule of estoppel to raise jurisdiction, and the rule that later legislation does not divest a tribunal already exercising jurisdiction over a pending case.